The Irish President has signed into law the Betting (Amendment) Act, 2015 (the "Act"). This new legislation will update and extend the regulatory regime in Ireland in relation to bookmakers licences, as provided for in the Betting Act 1931, to include all remote betting operators who are accepting (or in the case of betting exchanges, facilitating), bets from Irish customers.
Remote operators, regardless of whether or not they have a physical presence in Ireland, will henceforth be required to obtain an Irish licence in respect of bets which they accept, or facilitate, from Irish customers and to pay tax on betting transactions with Irish customers. In addition to this, current holders of retail bookmakers licences (referred to simply as "bookmakers licences" in the Act) will be required, on the expiry of those licences, to apply for a new licence in accordance with the licensing application process provided for in the Act.
The principal features of the Act are as follows:
Three types of betting licence
There are three types of betting licence provided for in the Act;
- a bookmaker's licence for retail bookmakers;
- a remote bookmaker's licence for operators offering remote betting to customers based in Ireland; and
- a remote betting intermediary's licence for operators who facilitate Irish customers making bets (i.e. betting exchanges).
The legislation updates the provisions relating to a retail bookmaker's licence and allows a bookmaker operating under a bookmaker's licence to also accept bets placed remotely, provided the value of those bets in any one year does not exceed the lower of; (i) €250,000; or (ii) €10% of the bookmaker's turnover in that year. This will be a welcome feature of the new licensing regime for small, independent bookmakers.
Licensing application process
- Henceforth it will be possible for a corporate entity, as well as an individual, to apply for a licence. The corporate entity applying for the licence should be the entity acting as the bookmaker/betting exchange operator for Irish customers.
- The application process for the three types of licence is broadly similar and essentially involves a two stage process:
1. Obtaining a Certificate of Personal Fitness
- The applicant (or where a corporate entity is applying for a licence, each “relevant officer” of the corporate entity) must apply for a Certificate of Personal Fitness (COPF) from either the Irish police or the Minister for Justice, depending on the type of licence that is being applied for and whether the applicant is resident in Ireland or elsewhere.
- A "relevant officer" is defined in the legislation as; "(a) a person who exercises control (within the meaning of Section 11 or 432 of the Taxes Consolidation Act 1997) in relation to the body (for example, by means of the holding of shares or possession of voting power); (b) a member (including the chairperson) of the body, or the board of directors of the body, or any other person acting in such capacity, or (c) the managing director or chief executive officer of the body, or any other person acting in such capacity".
- On a literal reading of this definition, only one of the above categories of persons need apply for a COPF. However, it remains to be seen what guidance the Irish revenue authorities will issue in relation to this.
- Once granted, the certificate(s) of personal fitness must be submitted to the Revenue Commissioners within 21 days to remain valid.
2. Application to the Revenue Commissioners for a licence
- The COPF must be submitted along with an application form to be prescribed by the Revenue Commissioners, the excise duty (or the first instalment thereof) and in the case of a corporate entity, a list of the names of the relevant officers.
- Before the Revenue Commissioners will issue the licence, it will check that the applicant and, where applicable, each relevant officer of the applicant, has a valid tax clearance certificate.
Period of validity of a licence
- The Act provides that a licence will be valid for two years. Bookmaker’s licences will expire on 30 November of every second year following the enactment of the legislation. Remote betting licences and remote betting intermediary’s licences, will expire on 30 June of the second year following the enactment of the legislation.
- The excise duty on the initial grant, and renewal, of a bookmaker’s licence is €500.
- The excise duty payable on the initial grant of a remote bookmaker’s licence, and a remote betting intermediary’s licence is €10,000. Though the wording of the legislation is not entirely clear, it would appear that the fee payable on the renewal of remote licences is €10,000 together with a fee linked to the level of annual turnover/level of annual commission earnings, in the previous year.
- A licensee can choose to pay the excise duty in full at the time that the licence is issued, or by way of two equal instalments.
- The Act, and the related provisions in the Finance Act 2002, extend the existing 1% turnover-based betting duty which currently applies to bookmakers (referred to in the legislation as "betting duty"), to remote bookmakers. The betting duty for remote bookmakers is 1% of "every bet entered into", (i.e. 1% of turnover) with "persons in the State".
- Betting duty (to be known as betting intermediary duty), is to apply to remote betting intermediaries, at a rate of 15% of commission charges. "Commission charges" means the amount that parties in the State are charged, whether by deduction from winnings or otherwise, for using the facilities of a remote betting intermediary.
Offences and Enforcement under the new legislation
- It is an offence to operate as a bookmaker, a remote bookmaker or as a remote betting intermediary, without a licence. The penalty for operating without a licence is a fine of up to €150,000, for a first offence (€300,000 for subsequent offences), or imprisonment for up to five years, or both, on conviction on indictment.
- Where a prosecution is brought and an operator fails to appear before the Irish court, the operator will be considered to have entered a plea of not guilty and can be prosecuted in absentia.
- The Act gives the Irish revenue authorities the power to issue compliance notices to third parties which provide certain facilitation services to unlicensed operators such as facilitating advertising or providing internet services that would assist the unlicensed operator to carry on its business. A failure to comply with the compliance notice is an offence.
Other provisions of note – creation of a betting account with underage persons and the removal of the prohibition on advertisements relating to betting on football games
- The Act extends the offences for betting with underage persons (i.e. persons under the age of 18) to include "the creation of a betting account". The legislation provides that it is a good defence to show that the operator believed and had reasonable cause for believing that a person was over 18, but age verification checks would most likely have had to have been carried out at the time that the account is created rather than later, to avail of this defence.
- The Act repeals the previous prohibition on advertisements relating to betting on football games which will be welcomed by bookmakers for providing clarity on this issue.